Execute SQL script with Azure ARM template - postgresql

Question

I'm deploying PostgreSQL server with a database and trying to seed this database with SQL script. I've learned that the best way to execute SQL script from ARM template is to use deployment script resource. Here is part of a template:
{
"type": "Microsoft.DBforPostgreSQL/flexibleServers/databases",
"apiVersion": "2021-06-01",
"name": "[concat(parameters('psqlServerName'), '/', parameters('psqlDatabaseName'))]",
"dependsOn": [
"[resourceId('Microsoft.DBforPostgreSQL/flexibleServers', parameters('psqlServerName'))]"
],
"properties": {
"charset": "[parameters('psqlDatabaseCharset')]",
"collation": "[parameters('psqlDatabaseCollation')]"
},
"resources": [
{
"type": "Microsoft.Resources/deploymentScripts",
"apiVersion": "2020-10-01",
"name": "deploySQL",
"location": "[parameters('location')]",
"kind": "AzureCLI",
"dependsOn": [
"[resourceId('Microsoft.DBforPostgreSQL/flexibleServers/databases', parameters('psqlServerName'), parameters('psqlDatabaseName'))]"
],
"properties": {
"azCliVersion": "2.34.1",
"storageAccountSettings": {
"storageAccountKey": "[listKeys(resourceId('Microsoft.Storage/storageAccounts', parameters('storageAccountName')), '2019-06-01').keys[0].value]",
"storageAccountName": "[parameters('storageAccountName')]"
},
"cleanupPreference": "Always",
"environmentVariables": [
{
"name": "psqlFqdn",
"value": "[reference(resourceId('Microsoft.DBforPostgreSQL/flexibleServers', parameters('psqlServerName')), '2021-06-01').fullyQualifiedDomainName]"
},
{
"name": "psqlDatabaseName",
"value": "[parameters('psqlDatabaseName')]"
},
{
"name": "psqlAdminLogin",
"value": "[parameters('psqlAdminLogin')]"
},
{
"name": "psqlServerName",
"value": "[parameters('psqlServerName')]"
},
{
"name": "psqlAdminPassword",
"secureValue": "[parameters('psqlAdminPassword')]"
}
],
"retentionInterval": "P1D",
"scriptContent": "az config set extension.use_dynamic_install=yes_without_prompt\r\naz postgres flexible-server execute --name $env:psqlServerName --admin-user $env:psqlAdminLogin --admin-password $env:psqlAdminPassword --database-name $env:psqlDatabaseName --file-path test.sql --debug"
}
}
]
}
Azure does not show any errors regarding the syntax and starts the deployment. However, deploySQL deployment gets stuck and then fails after 1 hour due to agent execution timeout. PostgreSQL server itself, database and firewall rule (not shown in the code above) are deployed without any issues, but SQL script is not executed. I've tried to add --debug option to Azure CLI commands, but got nothing new from pipeline output. I've also tried to execute these commands in Azure CLI pipeline task and they worked perfectly. What am I missing here?